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Federal Register / Vol. 86, No. 137 / Wednesday, July 21, 2021 / Notices therefore, shareholders will know what the Subadvised Funds fees and expenses are and will be able to compare the advisory fees a Subadvised Fund is charged to those of other investment companies. In addition, Applicants assert that the requested relief would benefit shareholders of the Subadvised Fund because it would improve the Advisers ability to negotiate the fees paid to Subadvisers.
In particular, Applicants state that if the Adviser is not required to disclose the Subadvisers fees to the public, the Adviser may be able to negotiate rates that are below a Subadvisers posted amounts. Applicants assert that the relief will also encourage Subadvisers to negotiate lower subadvisory fees with the Adviser if the lower fees are not required to be made public.

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V. Relief for Affiliated Subadvisers 17. The Commission has granted the requested relief with respect to WhollyOwned and Non-Affiliated Subadvisers through numerous exemptive orders.
The Commission also has extended the requested relief to Affiliated Subadvisers.11 Applicants state that although the Advisers judgment in recommending a Subadviser can be affected by certain conflicts, they do not warrant denying the extension of the requested relief to Affiliated Subadvisers. Specifically, the Adviser faces those conflicts in allocating fund assets between itself and a Subadviser, and across Subadvisers, as it has an interest in considering the benefit it will receive, directly or indirectly, from the fee the Subadvised Fund pays for the management of those assets. Applicants also state that to the extent the Adviser has a conflict of interest with respect to the selection of an Affiliated Subadviser, the proposed conditions are protective of shareholder interests by ensuring the Boards independence and providing the Board with the appropriate resources and information to monitor and address conflicts.
18. With respect to the relief permitting Aggregate Fee Disclosure, Applicants assert that it is appropriate to disclose only aggregate fees paid to Affiliated Subadvisers for the same reasons that similar relief has been granted previously with respect to Wholly-Owned and Non-Affiliated Subadvisers.
11 Carillon Series Trust, et al., Investment Co. Act Rel. Nos. 33464 May 2, 2019 notice and 33494
May 29, 2019 order.

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VI. Applicants Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions:
1. Before a Subadvised Fund may rely on the order requested in the Application, the operation of the Subadvised Fund in the manner described in the Application will be, or has been, approved by a majority of the Subadvised Funds outstanding voting securities as defined in the Act, or, in the case of a Subadvised Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2
below, by the initial shareholder before such Subadvised Funds shares are offered to the public.
2. The prospectus for each Subadvised Fund will disclose the existence, substance and effect of any order granted pursuant to the Application. In addition, each Subadvised Fund will hold itself out to the public as employing the multimanager structure described in the Application. The prospectus will prominently disclose that the Adviser has the ultimate responsibility, subject to oversight by the Board, to oversee the Subadvisers and recommend their hiring, termination, and replacement.
3. The Adviser will provide general management services to each Subadvised Fund, including overall supervisory responsibility for the general management and investment of the Subadvised Funds assets, and subject to review and oversight of the Board, will i set the Subadvised Funds overall investment strategies, ii evaluate, select, and recommend Subadvisers for all or a portion of the Subadvised Funds assets, iii allocate and, when appropriate, reallocate the Subadvised Funds assets among Subadvisers, iv monitor and evaluate the Subadvisers performance, and v implement procedures reasonably designed to ensure that Subadvisers comply with the Subadvised Funds investment objective, policies and restrictions.
4. Subadvised Funds will inform shareholders of the hiring of a new Subadviser within 90 days after the hiring of the new Subadviser pursuant to the Modified Notice and Access Procedures.
5. At all times, at least a majority of the Board will be Independent Trustees, and the selection and nomination of new or additional Independent Trustees will be placed within the discretion of the then-existing Independent Trustees.
6. Independent Legal Counsel, as defined in Rule 01a6 under the Act,
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will be engaged to represent the Independent Trustees. The selection of such counsel will be within the discretion of the then-existing Independent Trustees.
7. Whenever a Subadviser is hired or terminated, the Adviser will provide the Board with information showing the expected impact on the profitability of the Adviser.
8. The Board must evaluate any material conflicts that may be present in a subadvisory arrangement. Specifically, whenever a subadviser change is proposed for a Subadvised Fund Subadviser Change or the Board considers an existing Subadvisory Agreement as part of its annual review process Subadviser Review:
a The Adviser will provide the Board, to the extent not already being provided pursuant to section 15c of the Act, with all relevant information concerning:
i Any material interest in the proposed new Subadviser, in the case of a Subadviser Change, or the Subadviser in the case of a Subadviser Review, held directly or indirectly by the Adviser or a parent or sister company of the Adviser, and any material impact the proposed Subadvisory Agreement may have on that interest;
ii any arrangement or understanding in which the Adviser or any parent or sister company of the Adviser is a participant that A may have had a material effect on the proposed Subadviser Change or Subadviser Review, or B may be materially affected by the proposed Subadviser Change or Subadviser Review;
iii any material interest in a Subadviser held directly or indirectly by an officer or Trustee of the Subadvised Fund, or an officer or board member of the Adviser other than through a pooled investment vehicle not controlled by such person; and iv any other information that may be relevant to the Board in evaluating any potential material conflicts of interest in the proposed Subadviser Change or Subadviser Review.
b the Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board minutes, that the Subadviser Change or continuation after Subadviser Review is in the best interests of the Subadvised Fund and its shareholders and, based on the information provided to the Board, does not involve a conflict of interest from which the Adviser, a Subadviser, any officer or Trustee of the Subadvised Fund, or any officer or board member of the Adviser derives an inappropriate advantage.

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